The UK trade agreement still leaves Britain facing high rates, says the governor of BOE

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The Britain’s trade agreement with the United States is “good news”, but it still leaves the higher effective rate than before Donald Trump began to increase the barriers to members of America, according to the Governor of the Bank of England.

Andrew Bailey warned on Friday that the impact of the War of trade In the economy of the United Kingdom it would depend in part on the treatment of other countries with the President of the United States, and emphasized that the uncertainty was affecting British companies.

“He will leave the highest effective rate than it was before all of this begins. I think we have to take it into account” Fit He told a conference in Reykjavik.

“The impact of all this development on the commercial front on the perspectives of the United Kingdom is conditioned not only to the United Kingdom trade agreement, but also to which the rest of the world also agrees,” he added, even when he welcomed the agreement as “good news.”

BOE on Thursday reduced its reference interest rate to Quarter points up to 4.25 percent According to forecasts showing the largest global commercial conflict, it will have a “quite negative impact on the perspectives of the United Kingdom,” according to Bailey.

This had been partially offset by the financial market movements that relieved a little of the pressure, he said. In his last forecasts on Thursday, the BOE estimated that world commercial tensions would decrease the level of British GDP 0.3 percent in three years.

The Central Bank predicted the UK’s economic growth of 1 % this year and 1.25 percent by 2026.

The United Kingdom on Thursday traveled the first agreement with the United States since Trump began to impose high rates, according to the cuts on punitive rates in car and steel exports, but did not reverse a 10 percent tax tax that applies to most goods.

“When I go through the country in the United Kingdom, companies tell me:” We are delaying investments because we are too insecure about what the world will look like, “Bailey added.

Two members of the BOE’s monetary policy committee, Swati Dhingra and Alan Taylor, voted for a semicircular cut this week, while Chief Economist Huw Pill joined Catherine Mann for no change.

Bailey voted with the majority in favor of a reduction to 4.25 percent, a level that was seen in 2023.

He said on Friday that there was a case for a greater semicircular reduction due to commercial uncertainty, but that reduction was risked to be “out of proportion”, as inflation was mainly driven by domestic factors.